Creeping isn’t a rage on bourses
Tisco swears by positive EVA
Honda swerve shakes Everest
Tata Tea offers Lankan flavour
Email phones from Bharti Tele soon

Calcutta, April 14: 
The decision to increase the creeping acquisition limit from 5 to 10 per cent after the September 11 attacks last year failed to generate the expected spurt in promoter buying, even as prices hit rock bottom. Though the relaxation has been extended till September 30 this year, there appear to be no takers yet.

Even the Tatas, who are known to have a remarkable appetite for shares of their group companies, increased their stake only by a couple of per cent in some cases.

The same is true for the A.V. Birla group, and the likes of Nusli Wadia and Rahul Bajaj. In fact, none of them appear to have overshot the earlier 5 per cent threshold in the last financial year. The promoters of India Cements were the closest — they increased their stake by 4.9 per cent to 45.12 per cent.

Even the Oberois—the promoters of EIH Ltd, the country’s second largest hotel chain—increased their control by only 1.8 per cent, despite the threat from three ITC investment firms, which have built a 13.8 per cent stake in the company.

The Tatas increased their stake in most of their group companies, except in Tata Tea, in which their holding fell 0.48 per cent to 29.51 per cent over the last year.

In Indian Hotels, the Tatas increased their stake by 2 per cent to 37.38 per cent, while in Tisco they raised their control marginally to 26.22 per cent. In Trent Ltd—the retailing major that manages the Westside chain—they raised their holding by 1.5 per cent to 26.48 per cent.

In Telco, however, the increase in promoters’ stake was significant—6.86 per cent— but that was due to a rights issue. In Tata Telecom, the promoters increased their stake by a little over 1 per cent to 25.34 per cent, while in Tata Power, they raised it by 0.5 per cent to 32.55 per cent.

And, they have increased their stake in Tata Finance above the 51 per cent-mark to a level of 63.58 per cent between January and March this year, even before divesting equity in favour of a strategic partner, says PTI.

Nusli Wadia tightened his control over Bombay Dyeing and Britannia, but this was done through buyback schemes. In Bombay Dyeing, Wadia raised his stake by 2.54 per cent to 42.68 per cent, while in Britannia he increased his holding by 1.63 per cent to 45.34 per cent.

Of the A.V. Birla group companies, there was no change in control at Indal, but in the other aluminium major, Hindalco, the group raised its stake by 1.4 per cent to 22.78 per cent.

Among infotech companies, the promoters of NIIT increased their stake by 3.35 per cent to 38.45 per cent, while the promoters of Infosys Technologies sold more than 2.8 lakh shares for over Rs 100 crore. Their holding fell 0.43 per cent to 28.72 per cent.

For auto majors, there was no change in promoter holding in Bajaj Auto and Hero Honda. While in Hero Honda, the Munjals continue to hold 26 per cent, the promoters control 28.59 per cent in Bajaj Auto.

In Reliance Industries, which is merging with Reliance Petroleum to become India’s second Fortune 500 company, the Ambanis raised their stake by 0.53 per cent to 43.77 per cent through creeping acquisitions. These shares were not bought from the market, though it had shareholders’ approval for a buyback.


Mumbai, April 14: 
Tata Iron and Steel Company (Tisco) sees the attainment of a positive economic value added (EVA) as a critical measure as it gears up to face the challenging conditions governing the industry.

Tisco has set a target of being EVA positive by the year 2006. Company officials said that on achieving this feat, it probably would be the world’s first steel company to return to positive shareholder value.

“While our steel plant constantly makes profits, the company is not returning positive shareholder value. However, we feel that Tisco is coming closer to this achievement and it will be attained by 2006,” a senior company official told The Telegraph.

EVA is touted to be a critical performance measure linked to the creation of shareholder wealth. It is defined as an amount by which earnings exceed or fall short of the required minimum rate of return that shareholders could get by investing in comparable securities having similar risk.

Tisco officials here claimed that the exercise of moving towards a positive EVA has already begun by increasing employee awareness about this concept. Sources added that all internal communications for the next couple of years would now be channelled towards building a positive EVA.

The company is now working out on a vision and a roadmap for the next five years to create “the steel company of the future”.

This exercise recently saw Tisco undertake a massive internal programme of ascertaining the views of its employees and “co-create a vision”. A final version of this vision which will discussed by the company’s board and group chairman, Ratan Tata, is slated to be completed by the next fortnight.

These efforts by the steel major come amid conditions of oversupply in the domestic markets and protectionism at the global level. In fact, the US recently imposed a 30 per cent tariff on HR, CR and galvanised sheets, HR and cold finished bars. However, with international steel prices looking up in recent times, there has been a glimmer of hope, though experts point out that it is still early days as yet.

For the fiscal year ending March 31, 2002, the demand growth in the domestic markets is put between 2-4 per cent. Due to the oversupply situation prevailing in the country, domestic prices are expected to be lower than landed import prices.

Tisco officials say that in such times, it has focussed on cost reduction, value-added product mix and productivity improvement among others to improve its bottomline. It is now planning to better its product mix for the current fiscal.


New Delhi, April 14: 
Everest Advertising has lost two plum accounts—car maker Honda Siel and Honda Scooter and Motorcycle Ltd. The two accounts, with combined billings of about Rs 25 crore, have been farmed out to creative hot shop Dhar & Hoon, and Triton Communications respectively.

Sources at Everest have confirmed the shift of the Honda accounts, which have been with the agency for about five years. Sources at both Triton Communications and Dhar & Hoon have also confirmed the recent account gains. Last year, Honda spent Rs 10 crore on advertising for its scooter and motor cycles; sources said that it could rise to Rs 15 crore this year.

The account shift comes soon after former Everest president Ajit Shah moved to Dhar & Hoon as executive director. The accounts pertained to Everest’s Dentsu aligned business. Dentsu has a 20 per cent stake in Everest. Industry sources are speculating that Dentsu may sell its stake in Everest in the near future.

In the last month, some other noteworthy accounts have changed hands. Hindustan Thomson Associates has bagged new accounts with billings of about Rs 50 crore annually.


Calcutta, April 14: 
Tata Tea Ltd has decided to offer teas from its Sri Lankan tea estates for connoisseurs in the country, despite the high customs duty of 100 per cent.

The country’s largest tea producer has 18 Sri Lankan tea estates in its fold through its joint venture company Watawala Plantations.

The tea will be available under the Zesta brand name. “It has been decided to arrange and sell some of our own Sri Lankan teas in the country,” said P. T. Siganporia, deputy managing director of Tata Tea.

The company has made a quiet launch in the south Indian markets, especially Chennai and Bangalore, besides Mumbai. Upmarket teas under the Zesta brand are also being sold through the Taj Group of hotels.

“We know that the company has to pay a high import duty for Sri Lankan tea, but consumers are ready to pay. These teas are meant only for upmarket consumers. At the moment we do not have any intentions of sell Sri Lankan teas in volumes,” Siganporia said.

Zesta was first launched in Sri Lanka in a 250 gram PET bottle of premium leaf tea. Zesta also has an extensive range of tea bags, including several fruit flavours.

He said Watawala Plantations might not pay any dividend this year to Tata Tea. “Last year they paid a maiden dividend of 10 per cent to Tata Tea,” he said.

Watawala Plantations is a joint venture between Tata Tea and Estate Management Services of Sri Lanka.

In 1992, the Sri Lankan government decided to privatise the management of the then existing 22 regional plantation companies, which consisted of tea, rubber, coconut and palm oil. This paved the path for a strategic joint venture between Estate Management Services, a Sri Lankan firm, and Tata Tea, which took over the management of a multi-crop plantation company—Watawala Plantations.

Watawala Plantations manages 18 selected prime tea estates with few rubber plantations, as well as Sri Lanka’s only palm oil factory.

The total area of Watawala Plantations is 12442.13 hectares, of which 41 per cent is tea, 18 per cent is rubber, 8 per cent is palm oil and the rest 7 per cent is kept aside for the purpose of fuel wood.

Siganporia said Watawala has fetched best prices in the Colombo auctions in 2001-02.

The market for Sri Lankan tea remained buoyant following sustained demand from the Middle East, Russia and CIS countries which contributed to the higher price realised.


Calcutta, April 14: 
Bharti Teletech, a Bharti Enterprise company and makers of the Beetel brand of phones, is in the final stages of testing its e-mail enabled phones.

V. J. Prakash, executive director and chief executive officer said: “The product is being tested for its viability by service operators. Since this is an operator-driven product, the features to be incorporated will depend on the demand envisaged by operators.”

The instrument will have a large screen to display e-mails, with an attached keyboard to compose and send mails.

Among other features, the phone will have a colour screen, browsing features, telephony features, 5 e-mail IDs and an 8MB memory.

The price will depend mainly on the features available, but could be in the range of Rs 6,000 to Rs 11,000.

The phone has been developed in association with Hong Kong-based Rockway and British firm SunCorp.

Prakash, however, said once the phone is introduced in the open market it could cost less than Rs 1,000.

Bharti Teletech is also giving the final touches to its SMS-enabled phones, which will be launched by the third quarter of 2002-03. “We have already tested the product and shared the product concept with Bharti, Videsh Sanchar Nigam Limited (VSNL) and Mahanagar Telephone Nigam Limited (MTNL),” adds Prakash. The phone will be priced below Rs 3,000.

Speaking on investment plans for the current financial year, Prakash says the company will now focus on consolidating its base.

“We have sold 1.1 million phones will March 31, 2002, and expect to clock a turnover of Rs 150 crore. This year, the thrust is on introducing new technologies in phones, brand building and strengthening our channel network. We will also be launching new models of cordless phones this year.”

Prakash further added that around 4 to 5 per cent of the total earnings are spent on research and development and 7 to 8 per cent on brand building. Bharti Teletech presently has 5,000 outlets and 150 distributors in India.


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